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Austria The National Election of 1986 and the Grand Coalition of 1987-90
The election of Waldheim had a large impact on Austrian
domestic politics as well. After Waldheim's victory, Sinowatz,
the SPÖ chancellor who had been perceived as ineffective,
resigned, and the SPÖ turned to Franz Vranitzky to fill the top
position. Vranitzky decided to dissolve the SPÖ-FPÖ coalition
when the leadership of the junior party was usurped in September
1986 by Jörg Haider. Haider was prone to making controversial
remarks about Austria's place in the greater German cultural
identity, and Vranitzky had little hesitation in cutting the
SPÖ's ties to the FPÖ under its new leader. This action led to a
premature parliamentary election in November 1986. Pressures for
an early election also came from the financial failures in the
state industrial sector that had embarrassed the SPÖ-FPÖ
government.
The outcome of the election was a shock to both major
parties, as the FPÖ attained its highest vote total since 1953,
receiving 9.7 percent. The SPÖ lost ten seats in the Nationalrat,
dropping to eighty, and the ÖVP lost four, declining to seventyseven . After lengthy negotiations, in early 1987 the two major
parties decided to form a grand coalition for the first time
since 1966. Vranitzky remained chancellor, and Alois Mock, leader
of the ÖVP, became vice chancellor and foreign minister. The two
parties agreed to split the remaining cabinet posts, with the
Ministry for Justice going to a person with no party affiliation.
Former Chancellor Kreisky complained loudly about Vranitzky's
giving the foreign ministry portfolio to the ÖVP, and he resigned
as honorary chairman of the SPÖ in protest.
The new grand coalition was not able to function in the cozy
way the old grand coalition had because media scrutiny was much
greater in the 1980s than it had been between 1945 and 1966.
Further, one of the coalition's top priorities was to address the
problems in the state industrial sector and the budget deficit in
general. The government carried out job cutbacks and early
retirement programs at VÖEST-Alpine, the state-run iron and steel
conglomerate, and also reduced subsidies to farmers. These
policies hurt key interests of both parties' core constituencies,
but ÖVP and SPÖ leaders saw little alternative to tackling these
problems head on. Austrian politics had entered a new stage that
was short on the optimism of the Kreisky era and focused on
pragmatic and hard-headed solutions to economic problems.
The ÖVP-SPÖ government benefited from improving economic
conditions, especially from 1988 onward. Economic growth for the
years 1988-90 averaged around 4 percent annually. Other economic
indicators were also positive, with unemployment averaging around
5 percent and inflation running at 2.5 percent. In the political
realm, however, the coalition was plagued by numerous scandals
involving primarily high-ranking officials of the SPÖ. In late
1988 and early 1989, two of these officials were forced to resign
for large-scale tax evasion. Chancellor Vranitzky, who had
replaced Sinowatz as party chairman in May 1988, initially was
hesitant to fire his friend Günther Sallaberger, who had failed
to pay taxes on S1.8 million (for value of the
schilling--see Glossary).
Pressure to remove Sallaberger became intense after
party members were shocked to learn that he was an example of a
trend in which holders of multiple posts within the SPÖ were
actually earning more money than the chancellor.
An even larger scandal emerged when the SPÖ became embroiled
in an insurance scandal centering on Udo Proksch, the notorious
former owner of Demel's, Vienna's most famous coffee house and
meetingplace for SPÖ bigwigs. A ship commissioned by Proksch, the
Lucona, had sunk in 1977 with the loss of six crew
members. Proksch claimed that the ship had been carrying a
uranium processing plant, but documents describing the ship's
cargo were found to have been forged, and Proksch was accused of
deliberately sinking the vessel. The investigation into the
affair moved at a snail's pace. By early 1989, a parliamentary
committee that had been formed to look into the case began to
focus on two leading SPÖ officials, Minister for Interior Karl
Blecha and Leopold Gratz, the first president of the Nationalrat.
The committee's investigations provided some of the most
dramatic political theater ever seen in the Second Republic.
After tough cross-examinations of subordinate officials, the
committee and the public began to suspect that Blecha had
deliberately slowed up the Lucona investigation in the
early 1980s. Blecha's denials of any wrongdoing were
unconvincing, and Vranitzky forced him to resign.
Gratz, who had been foreign minister at the time the forged
documents relating to the Lucona's cargo had arrived in
Vienna, was suspected of even greater complicity in the affair.
As the committee did its work, it appeared increasingly clear
that Gratz had covered up important details of the affair to
protect Proksch. Gratz resigned his position when, like Blecha,
he had lost all support within the SPÖ. In the face of a very
bleak ethical situation, Vranitzky could at least claim that he
had acted relatively quickly to clean house.
Data as of December 1993
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